Colt Technology Services to shell out $1.8bn for Lumen's EMEA business
Colt Technology Services has entered into an 'exclusive arrangement' for the proposed sale of Lumen’s Europe, Middle East and Africa (EMEA) business for $1.8 billion.
The divestiture of Lumen's EMEA business is comprised of its terrestrial and subsea networks, data centres and network equipment in the region. Most of Lumen’s EMEA employees will also join Colt on completion of the deal.
The $1.8 billion figure represents ~11x the EMEA business's estimated 2021 adjusted EBITDA and is set create additional value for its shareholders.
Once the transaction is completed, the additional capital from the sale as well as a streamlined portfolio will enable more focused investments in enterprise for Lumen and help the company maintain a strong balance sheet.
“We are continuing to execute on portfolio optimisation at Lumen, creating additional value for our shareholders by monetising non-strategic assets at accretive multiples,” said Jeff Storey, president and CEO of Lumen.
“This transaction would enhance our focus so we can invest more efficiently in our most strategic opportunities – our key Enterprise and Quantum Fiber initiatives – and partner with regional leaders like Colt in Europe and Cirion in Latin America to continue serving our multinational enterprise customers.”
Colt is to benefit from extended infrastructure to new geographic markets via European countries, cities and data centres and a boost to its services and capabilities for diversified enterprise, hyperscaler, government and wholesale customers.
It also enables Colt to meet growing enterprise and international IP traffic in EMEA using its soon to be extensive terrestrial and subsea footprint.
“This transaction would mark the next chapter in Colt’s exciting story of global growth and world-class innovation,” said Keri Gilder, CEO of Colt Technology Services.
“We’re deeply committed to building extraordinary connections for our people, customers and partners across our digital infrastructure. This acquisition would strengthen and extend these connections across existing and new geographies, helping us to accelerate growth and bring the power of the digital universe closer to our customers.”
Under the terms of the deal, Lumen will enable to continue to serve multinational enterprise customers through its strategic partnership with Colt.
It will also allow Colt to continue serving the needs of the EMEA-based customers with service needs outside of EMEA.
“Lumen has a strong interest in Colt’s success, and we expect to remain a close business partner and key customer,” added Storey.
“Colt’s strong reputation and customer focus make them the ideal partner to serve the needs of our customers, and we expect to remain Colt’s partner of choice for their customers’ needs in North America.”
“Colt and Lumen share values, and a drive to deliver outstanding customer experience,” added Gilder.
“This combination is powered by amazing people and incredible infrastructure and is inspired by technology’s ability to change the way we live and work.”
The deal is set to close late 2023 subject to customary conditions and regulatory approvals in the US and select countries where Colt operates.